Friday, January 27, 2012

Opinion: Why We Can't Seem to Cut Spending

We currently have racked up a $15.5 trillion national debt... one third
of which was added in just the past four years... and we are borrowing
40 cents of every dollar we spend.

There seem to be three approaches to solving this problem:

* Cut spending. Stop borrowing.
* Tax the crap out of the rich to pay for it
* Some combination of both

But we have a problem with all three of these. Raising taxes during a
recession is generally considered the worst possible thing you can do.
The last President who tried it was Herbert Hoover in 1929, and it was
widely thought to have made the Great Depression even worse. Besides,
when people are struggling to buy groceries the very last thing they
need is higher taxes.

Even President Obama, who campaigned on a promise that he would "repeal
the Bush tax cuts" reversed himself right before they expired and asked
Congress to extend them. He told us that "raising taxes during a
recession would cost us an additional million jobs." And he was right.

And it's not very easy to cut spending either, because our
"discretionary spending" is the smallest portion of our federal budget.
If you want to cut any entitlement, you will have voters howling in
protest. I'm not talking only about welfare and food stamps here, these
are relatively small costs. The big entitlements are social security,
medicare, and medicaid.

Think about what happens whenever you try to cut these things:

Cutting Social Security and Medicare is almost
impossible because those people actually PAID for it. We stole their
trust fund, and now we can hardly ask them to take a cut. Plus, senior
citizens never forget to vote. This is why they call social security the
"third rail of politics."

Cutting Interest Payments on the Debt is even harder to
do. This would be "defaulting" and would send the nation into a total
financial collapse. This simply is not an option.

Cutting Agricultural Subsidies could help, but the
amount of money involved is relatively small. And then all the farm
states would be up in arms, and food prices would go up.

Cutting National Defense is a risky proposition, but it
will happen. Still, the entire defense budget is less than half of our
annual deficit. That's right, if we had absolutely no army or navy, we
would still be $800 billion in the red. Plus the current defense budget
is near an all time low as a percentage of the budget.

Go ahead, cut welfare, food stamps, college loans, foreign aid, veterans
benefits, cut it all out, and you still haven't made a significant dent
in our deficit.

Because all our discretionary spending combined is
currently less than the budget deficit, and half of it is defense
related.

Is there a way out of this mess?

Yes, but it isn't one of the three ways listed at the top of this post.

The only way out of this mess is to put America back to work. President
Obama might think that "10% unemployment is the new normal" but it
simply isn't sustainable for very long. We need more people working and
less people looking to the government for sustenance. We really need more
people producing things we can export.

This means we would somehow have to reverse the flow of jobs offshore.
And this is lot easier said than done, since we seem to like buying
imported goods for less at Walmart.

The best solution may be to cut spending where we can, then freeze the
rest of it, while having a real plan for domestic job creation. Our
government must shrink. We cannot afford to have upwards of 20% of our
total workforce employed by various levels of government.

People want things for free

The key to restoring our economy isn't in extending unemployment benefits, or in more generous welfare and food stamp subsidies... it's in putting America back to work.

We simply cannot continue to be a nation who consumes a lot, and then
produces less and less. And who borrows money to pay for it. We cannot
be "Greece on a grand scale." Not if we want our children and
grandchildren to enjoy some degree of prosperity in their lives.

Incidentally, Europe is in much the same shape. Their social spending
will overwhelm their own economies is a few more years. The future might
belong to the undeveloped nations who have resources... like Brazil,
India and China.

My premise is simply this: you cannot solve this problem by cutting spending (because most of our spending can't be cut) or by taxing (because there isn't enough money out there to keep the big wheel going for very long.)

The only real solution is to make us a productive nation again. One that manufactures and exports, and not one that keeps consuming more food stamps and more benefits from government.

Member of the Right Blogfest

Followers

DISCLAIMER:

The views in The Spin Cycle are strictly my own, and not of any other person or organization.

The Spin Cycle is intended as political satire, and is provided as entertainment only, even if the content seems shockingly accurate!

The names in all our stories were invented, except in cases when public figures are being satirized. Any other use of real names is accidental and coincidental.

If you are aware of any copyright infringement or have any other queries or complaints, please contact us at marty4650@yahoo.com as soon as possible so that we can investigate and, where necessary, correct the problem.

Freedom of Speech is still protected by the U.S. Constitution.

At least for now.

Anyone who is offended by this should get a sense of humor, or at least watch CNN, CBS, MTV, PBS, NBC, ABC, CNBC, or MSNBC for an alternative view.

Or, you could listen to NPR or read the NY Times, or you could visit MoveOn.org or the HuffingtonPost.